JP2009503703A - System for restricting active transactions in electronic trading system - Google Patents

Abstract

  A system for managing trading orders has a memory operable to store trading credit associated with a trader. The system further includes a processor operable to receive a trading order from the trader and determine a trading credit associated with the trader. If the received trading order is a passive trading order, the processor is further operable to increase trading credit and present the received trading order for execution. If the received trading order is an active trading order, the processor is further operable to calculate a reduction in trading credit. If subtracting the calculated decrease from the trade credit does not cause the trade credit to fall below a configurable threshold, the processor presents the trade order received for execution and is calculated from the trade credit It is further operable to subtract the decrease. If subtracting the calculated decrease from the trading credit results in the trading credit falling below a configurable threshold, the processor is further operable to avoid execution of the received trading order.

Description

  The present invention relates generally to electronic trading, and more particularly to a system for restricting active trading orders.

  In recent years, electronic transaction systems have been widely supported for transactions of various items (products, services, financial products, product transactions, etc.). For example, electronic trading systems have been created that facilitate trading of financial products and commodity transactions (stocks, bonds, currencies, futures contracts, oil and gold, etc.).

  Many of these electronic trading systems use bid / sell processing. In the bid / offer process, bids and offers are presented to the system by the passive side, and these bids and offers are hit or lift (or take) by the active side. ) For example, a passive trading partner may offer a “bid” to purchase a particular trading product. In response to such a bid, the active trading partner may present a “hit” to indicate an intention to sell the trading product to the first trading partner at a predetermined price. Alternatively, the passive counterparty presents an “offer” to sell a specific trading product at a given price, and the active counterparty receives from the active counterparty at a given price. A “lift (or“ take ”)” may be presented in response to a sale to indicate an intent to purchase the merchandise.

  In accordance with the present invention, the disadvantages and problems associated with conventional electronic trading systems are substantially reduced or eliminated.

  In one embodiment, a system for managing trade orders has a memory operable to store trade credits associated with a trader. The system further includes a processor operable to receive a trading order from the trader and determine a trading credit associated with the trader. If the received trading order is a passive trading order, the processor is further operable to increase trading credit and present the received trading order for execution. If the received trading order is an aggressive trading order, the processor is further operable to calculate a reduction in trading credit. If subtracting the calculated decrease from the trade credit does not cause the trade credit to fall below a configurable threshold, the processor presents the trade order received for execution and is calculated from the trade credit It is further operable to subtract the decrease. If subtracting the calculated decrease from the trading credit results in the trading credit falling below a configurable threshold, the processor is further operable to avoid execution of the received trading order.

  Various embodiments of the present invention may enjoy a number of technical advantages. It should be noted that one or more embodiments may or may not enjoy some or all of the advantages described below.

  One technical advantage is that the use of transaction credit reduces network traffic and saves computer resources in an electronic transaction system. In a trading system that does not use trading credit, the trading platform processes and presents all trading orders received from traders for execution. In such a system, each trading order is processed and presented for execution regardless of whether the trading order is an active trading order or a passive trading order. The processing and transmission of all trading orders results in a high level of network traffic and consumes a high level of processing resources. In contrast, according to certain embodiments, an electronic trading system that uses trade credits does not process and send all trade orders from traders. In particular, upon receiving a passive trading order from a particular trader, the trading platform increases the trading credit associated with that trader. However, upon receiving an active trading order from a particular trader, the trading system calculates a reduction in trading credit associated with that trader. If subtracting the calculated decrease from the trading credit results in the trading credit falling below a configurable threshold, the trading platform may not process and send active trades from traders. Or it may be rejected. Thus, in some embodiments, a trading platform may not process or send all trading orders from traders. Since trading platforms use trading credit to filter that specific trading orders are processed or transmitted, the use of trading credit reduces network traffic and saves computer resources.

  Another advantage is that the use of transaction credit can increase the liquidity of an electronic trading system. By reducing trading credit in response to active trading orders and increasing trading credit in response to passive trading orders, the trading platform encourages traders to present passive trading orders. Increasing passive trading orders can increase the liquidity of the trading system.

  Another advantage is that the trading platform can increase or decrease trading credit in proportion to the trading value associated with trading orders. Thus, the presentation of a large passive trading order with a high trading value can result in a further increase in trade credit compared to the presentation of a small passive trading order with a low trading value. Thus, the trading platform may encourage traders to present large passive trading orders. This allows the trading platform to increase the liquidity of the trading system.

  Another advantage is that the trading platform can cause trade credit to decay over time. For example, if a particular trader does not present a trading order for a configurable period, the trading platform may cause the trading credit associated with that trader to decay or decrease at a configurable rate. By attenuating trading credit in response to relevant trader inactivity, the trading platform encourages traders to present trading orders more frequently. Frequent presentation of trading orders can increase the liquidity of the trading system.

  Other advantages will be readily apparent to one skilled in the art from the following figures, detailed description, and claims.

  For a full understanding of the present invention and the advantages thereof, reference is made to the following description, taken in conjunction with the accompanying drawings.

  FIG. 1 illustrates a trading system 10 according to a particular embodiment of the present invention. The system 10 may have one or more terminals 14 coupled to the trading platform 18 by one or more communication networks 20. In general, trading system 10 is further operable to receive and relay trading order 24 from trader 12 for execution. More specifically, trading system 10 is operable to determine and adjust trading credit 35 associated with a trader 12 in response to receiving trading order 24 from a particular trader 12. The adjustment of trading credit 35 may depend on whether the received trading order 24 is a passive trading order 24a or an active trading order 24b (passive and active). The detailed trading order 24 is described in detail below). In particular, trading platform 18 increases trading credit 35 when received trading order 24 is passive trading order 24a and decreases trading credit 35 when received trading order 24 is active trading order 24b. May be. If the received trading order 24 causes the trading credit 35 to fall below a configurable threshold 37, the platform 18 may avoid executing the received trading order 24. Thereby, trading platform 18 may generate an incentive for trader 12 to present more passive trading orders 24a and fewer active trading orders 24b. By encouraging traders 12 to present more passive trading orders 24a, trading platform 18 may increase the liquidity of trading system 10.

  The trading system 10 has one or more terminals 14. A particular terminal 14 represents any suitable local or remote end-user device that can be used by trader 12 to access one or more elements of trading system 10 (such as trading platform 18). Terminal 14 may receive, process, store and / or communicate information with a computer, workstation, telephone, internet browser, electronic organizer, personal digital assistant (PDA), pager, or other component of system 10. It may have other suitable devices (wired, wireless or both), components or elements possible. Terminal 14 may also have any suitable user interface, such as a display, microphone, keyboard, or other suitable terminal device, depending on the particular configuration and arrangement. It can be seen that there can be any number of terminals 14 communicatively connected to the trading platform 18.

  In some embodiments, terminal 14 may be communicatively coupled to interface server 15. In general, interface server 15 is operable to transmit trading orders 24, order price inputs 26, and market data between terminal 14 and trading platform 18. A particular interface server 15 coupled to terminal 14 for a particular trader 12 may store one or more trader profiles 18 and one or more trade credits 35 (discussed below). In one embodiment, interface server 15 is operable to generate and update trader profile 38 to determine, adjust and use trade credit 35 associated with trader 12. A particular interface server 15 may be communicatively coupled to any number and combination of terminals 14. The interface server 15 represents a general purpose personal computer (PC), Macintosh, workstation, Unix (registered trademark) type computer, server computer, or any suitable processing device. The interface server 15 may have any hardware, software, firmware, or combination thereof operable to perform the functions and / or operations described above.

  Terminal 14 is operable to receive trading order 24 from trader 12 and send trading order 24 to trading platform 18. Trading order 24 has an order to trade a product (eg, stock, holdings, bonds, mutual funds, options, futures trading, derivative products, currency, other financial products, or any suitable trading product, etc.) Also good. Such trading orders 24 can be bids, offers, market orders, limit orders, limit orders, order-only orders, unforeseen orders, good order cancelled (GTC) orders, good through You may have orders, all or none orders, any part orders, or other orders suitable for trading.

  In general, various types of trading orders 24 in trading system 10 may be characterized as passive trading orders 24a or active trading orders 24b. The active trading order 24b is an order that activates or triggers trading. In contrast, passive trading order 24a is an order that does not initiate or trigger trading by itself. “Hit” and “take” (eg, “lift”) are examples of active trading orders 24b. In general, “bid” and “offer” are examples of passive trading orders 24a. (However, in some cases, a bid or offer may be considered an active trading order 24b. For example, if a trader 12 presents an offer below the best bid price, the offer will trigger or trigger a deal. , May be considered active trading order 24b.) Examples of passive and active trading order 24 are shown. Passive trader 12 may offer a “bid” to purchase a specific amount of goods A at a given price. In response to such a bid, the active trader 12 may present a “hit” to the passive trader 12 to activate or trigger the sale of a specific amount of goods A at a predetermined price. In this example, the bid is a passive trading order 24a and the hit is an active trading order 24b. As another example, passive trader 24 may present a “sale” to indicate an intention to sell a particular amount of commodity A at a given price. Next, the active trader 12 presents a “lift” (or “take”) in response to the sale in order to trigger or trigger the purchase of a specific amount of goods A from the passive trader 12 at a predetermined price. May be. In this example, the offer is a passive trading order 24a and the lift (or take) is an active trading order 24b.

  Here, terminal 14 is described as being used by “Trader” 12, but the term “Trader” refers to the user acting on behalf of the principal, whether it is the principal, the individual, the individual, or the legal entity. It can be understood that this means broadly applicable to any user of trading system 10, whether it is a company (such as a company) or any machine or mechanism capable of placing and / or responding to trading order 24 in system 10. . The particular trader 12 may be a customer 12a. The other trader 12 may be a market maker 12b.

  The market maker 12b is any individual, company or other entity that presents and / or holds one or both of bids and offer trading orders 24 for the same item at the same time. For example, the market maker 12b may be an intermediary or bank that holds the company's bid and / or sale price with a given collateral, depending on its preparedness, willingness and possibility to purchase and / or sell security at a publicly estimated price. But you can. In general, market maker 12b displays bid and / or offer prices for a specific number of specific securities, and when these prices match, market maker 12b can immediately purchase and / or purchase from their account. Sell. According to certain embodiments, a single trading order 24 may be filled by multiple market makers 12b, possibly at different prices.

  Customer 12a may be any user of trading system 10 that is not market maker 12b. Customer 12a may be an individual investor, an agent acting on behalf of the principal, the principal, an individual, a legal entity (such as a company), or any machine that can place and / or respond to trading orders 24 with the system 10 Or a mechanism may be sufficient.

  In one embodiment, the market maker 12b may receive a specific order so that a trade order 24 received from an individual, company or other entity is treated as received from a traditional market maker 12b (eg, brokerage or bank). It may include individuals, companies, or other entities that are granted privileges. For example, a particular individual, company or other entity that may otherwise be treated as customer 12a may be granted the privilege of being treated as market maker 12b for purposes of the systems and methods described herein. In order to receive market maker privileges, an individual, company or other entity may pay a fee, pay a fee, or present and / or simultaneously maintain both bid and offer trading orders 24 for a particular product May be required. According to certain embodiments, an individual, company or other entity is designated as market maker 12b for a particular product, but may be designated as customer 12a for other products.

  In one embodiment, a market maker 12b multilayer system may be used. Trading platform 30 may have one or more criteria (eg, whether market maker 12b is associated with electronic input, whether market maker 12b is a bullish trader, or market maker 12b has specific information. Different privileges may be granted to different market makers 12b. The market maker 12b may be categorized into different layers for different tradeable products. For example, a particular market maker 12b may be classified as a first level market maker for products for which market maker 12b is a bullish trader and classified as a second level market maker 12b for other types of products. Also good.

  Terminal 14 may be communicatively coupled to order price input module 16. The order price input module 16 includes any suitable hardware and / or software that generates and / or communicates one or more order price inputs 26. In some embodiments, the order price input module 16 may be remote from the terminal 14 and the interface server 15. In other embodiments, the order price input module 16 may be included in the terminal 14 or the interface server 15. Thus, in certain embodiments, the functions and operations of order price input module 16 may be performed by terminal 14, interface server 15, or other suitable components of trading system 10. The order price input 26 may be a real-time (or substantially real-time) stream showing the current best bids and / or offers that the trader 12 wishes to send or make available for the item. For example, a particular market maker 12b supplies an order price entry 26 (eg, a quote spread) to multiple exchanges 40 and / or trading platforms 18, where the market maker 12b is in the general market at its best bid and offer price. May be allowed to overflow. According to a particular embodiment, market maker 12b generates revenue by continuously trading at its bid and offer price and profiting from the difference. Such a strategy is sometimes referred to as “trading the bid-offer spread”.

  Terminal 14 may be communicatively coupled to trading platform 18 via network 20. The network 20 is a communication platform operable to exchange data or information between the terminal 14 and the trading platform 18 and / or the market center 40. In one embodiment, network 20 may represent an Internet architecture that allows terminal 14 to communicate with platform 18 and / or market center 40. In other embodiments, the network 20 may be a plain old telephone system (POTS) that can be used by the trader 12 to perform the same operations or functions. In one embodiment, network 20 may be any packet data network (PDN) that provides a communication interface or exchange between any two nodes of system 10. The network 20 may further include any combination of the above examples, such as any local area network (LAN), metropolitan area network (MAN), wide area network (WAN). Wireless local area network (WLAN), virtual private network (VPN), intranet, or other that facilitates communication between terminal 14 and platform 18 and / or market center 40 It may further have a suitable architecture or system.

  Market Center 40 includes all types of order execution locations, including foreign exchange, Electronic Communication Network (ECN), Alternative Trading System (ATS), market makers, or other appropriate market participants. Have Each market center 40 holds bid and offer prices for a given transaction product, depending on the preparation, willingness and possibility of purchasing or selling at a publicly estimated price (also called market center price). A particular market center 40 may facilitate trading of multiple trading products (eg, stocks, bonds, fixed income securities, futures contracts, currency, precious metals, etc.). The market center may be communicatively coupled to trading platform 18 via network 20.

  Trading platform 18 is a trading architecture that facilitates relaying, matching, and other processing of trading orders 24. Trading platform 18 may have a management center or headquarters office for any person, company or entity that relays, matches, processes or fills trading orders 24. Accordingly, the trading platform 18 may be any hardware, software, personnel, device, component, element or object that may be utilized or implemented to implement the operations and functions of a government agency or supervisory entity that manages or operates a trading environment. You may have an appropriate combination. Trading platform 18 may include a processor 32 and a memory 34.

  The processor 32 is operable to record the trading order 12 in the memory 34 and relay the trading order 12 to the trading exchange 40. The processor 32 is further operable to execute the rules 36 stored in the memory 34 to process or relay the trading order 24 received from the trader 12. The processor 32 is operable to determine, adjust and use the trade credit 35 associated with the trader 12. The processor 32 may have any suitable combination of hardware and software implemented in one or more modules that provide the described functions or operations.

  Memory 34 is a random access memory (RAM), read only memory (ROM) that stores one or more files, lists, tables, or other configurations of information such as trading orders 12. Any suitable configuration of magnetic computer disks, CD-ROMs, or other magnetic or optical storage media, or other volatile or non-volatile memory devices. Although FIG. 1 shows memory 34 as internal to trading platform 18, it will be appreciated that memory 34 may be internal or external to the components of trading system 10, depending on the particular implementation. Further, the memory 34 shown in FIG. 1 may be different from other memory devices or indispensable for other memory devices for realizing any appropriate configuration of the memory device used in the transaction system 10. .

  According to a particular embodiment, memory 34 has rules 36 and a trader profile 38. In general, the rule 36 has software instructions that relay, match, process or satisfy the trading order 12. In particular, the rules 36 may have instructions for determining, adjusting and using the trade credit 35 associated with the trader 12.

  In general, the trader profile 38 includes information relating to the trader 12 identification information, transaction preferences, transaction history, and account. Trading platform 18 may allow a person or entity to register to use trading system 10 as a trader 12. When a particular trader 12 registers to use the trading system 10, the trading platform 18 may generate a trader profile 38 for that trader 12. Accordingly, for each trader 12 of trading system 10, memory 34 may store a corresponding trader profile 38. A trader profile 38 for a particular trader 12 may have relevant information (eg, trader 12 name, employer, account information, etc.). Trading platform 18 may further store a trade credit 35 associated with that trader 12 in a trader profile 38 of that particular trader 12.

  In general, trading credit 35 represents real or artificial credit, value or quantity that may facilitate processing of trading order 12. In particular, when trading platform 18 receives trading order 24 from trader 12, trading platform 18 may adjust trading credit 35 associated with trader 12 based on the type of trading order 24 received. Based on the amount of trading credit 35 associated with trader 12, trading platform 18 may further determine whether to accept received trading order 24. Transaction credit 35 may be expressed in terms of any real or artificial unit. For example, trading credit 35 may be represented as dollars (or other suitable currency), virtual dollars (or other virtual currency), stocks, bonds, credits or any suitable unit of any number and combination.

  The internal structure of the trading platform 18 and its associated interfaces, processors and memory devices are adaptive and can be easily modified, transformed, rearranged or reconfigured to achieve the intended operation of the trading platform 18. You can see that

  In operation, trading platform 18 manipulates trading credit 35 and generates incentives for trader 12 to present passive trading orders 24a and / or restrict active trading orders 24b. According to a specific embodiment, when the trader 12 presents a passive trading order 24a, the trading platform 18 increases the trading credit 35 associated with the trader 12 and places the trading order 24a into one or more markets for execution. Present to center 40. However, when the trader 12 presents an active trading order 24b, the trading platform 18 calculates a decrease in the trading credit 35 associated with the trader 12. If subtracting the calculated decrease from the trading credit 35 results in the trading credit 35 falling below a configurable threshold 37, the trading platform 18 avoids executing the active trading order 24b. If subtracting the calculated decrease from trade credit 35 does not cause trade credit 35 to fall below a configurable threshold 37, trading platform 18 will subtract the calculated decrease from trade credit 35 and execute For this purpose, an active trading order 24b is presented to one or more market centers 40. Thus, the active trading order 24b may cause a decrease in trading credit 35, while the passive trading order 24a may cause an increase in trading credit 35. If trade credit 35 associated with trader 12 falls below a configurable threshold 37, trader 12 presents one or more passive trade orders 24a to increase trade credit 35 well above configurable threshold 37 Until then, trading platform 18 may reject active trading order 24b from trader 12.

  According to certain embodiments, trading platform 18 may allow a person or entity to register to use trading system 10 as a trader 12. When the trader 12 registers to use the trading system 10, the trading platform 18 may generate a trader profile 38 for the trader 12 and may assign trade credit 35 to the trader 12. The amount of trade credit 35 assigned to trader 12 at the time of registration may be referred to as “initial trade credit”. According to a particular embodiment, trading platform 18 allocates the same or substantially equal amount of initial trading credit 35 to each new trader 12. In other embodiments, the initial trade credit 35 assigned to a particular trader 35 is based at least in part on one or more attributes of that trader 35. For example, the amount of initial trading credit 35 may be based in part on size, expected trading activity, trading history, affiliation, or any number and combination of trader 12 characteristics. Thus, in one embodiment, the initial trade credit 35 assigned to one trader may be different from the initial trade credit 35 assigned to another trader. Trading platform 18 may store trading credit 35 associated with a particular trader 12 in a trader profile 38 for that trader 12.

  According to certain embodiments, trading platform 18 may be configured to monitor trading sessions for a particular trader 12. A trading session indicates a configurable period of time used by trading platform 18 to monitor and / or manage the trading activity of a particular trader 12. In certain embodiments, trading system 10 may be configured such that a new trading session begins every hour, every day, every week, or other suitable time period. In another embodiment, trading system 10 may start a trading session for a particular trader 12 when that trader 12 logs into trading system 10 and ends when that trader 12 logs out of trading system 10. It may be configured to be defined as Trading platform 18 may be configured such that trading sessions are defined the same or different for each trader 12. In one embodiment, at the end and / or start of a trading session for a particular trader 12, trading platform 18 may have trading credit 35 associated with that trader 12 equal to the initial trading credit 35 assigned to that trader 12 at the time of registration. It may be reset so that

  In certain embodiments, trading order 24 may be related to trading value. The trading value represents the size, quantity and / or value of a particular trading order. For example, a bid for 1,000,000 shares of a particular stock at $ 50.00 per share may be considered to have a transaction value of $ 50,000,000. As another example, a hit on the face value of $ 10,000,000 for a 10-year note may be considered to have a transaction value of $ 10,000,000. Although the transaction value in the foregoing is expressed as dollars, it will be appreciated that the transaction value of trading order 24 may be expressed in terms of any suitable unit.

  As described above, in one embodiment, active trading order 24b causes a decrease in trading credit 35, while passive trading order 24a causes an increase in trading credit 35. In response to receiving passive trading order 24a, trading platform 18 may determine an increase in trading credit 35 based at least in part on one or more characteristics of passive trading order 24a. Such features may include, for example, the trading value, trading product type, or trading product quantity associated with the passive trading order 24a. In one embodiment, the increase in trading credit 35 may be a configurable percentage of the trading value of passive trading order 24a. For example, the memory 34 may have a rule 36 that increases the trading product 35 by 30% of the trading value of the passive trading order 24a. In this example, if trading credit 35 is $ 100,000 and passive trading order 24a has a trading value of $ 200,000, trading platform 18 may increase trading credit 35 to be $ 160,000. The trading credit 35 in the above example has increased by 30% of the trading value of the passive trading order 24a, but the increase is characteristic of any percentage of trading value, or any number and combination of passive trading orders 24a. It can be seen that it may be based on. Further, while the transaction credit 35 in the above example is expressed in terms of dollars, it will be appreciated that the transaction credit 35 may be expressed in terms of any real or artificial unit.

  Similarly, according to a particular embodiment, trading platform 18 may determine a reduction in trading product 35 associated with a trader 12 in response to receiving active trading order 24b from a particular trader 12. It is possible to operate. Trading platform 18 may determine a reduction in trading product 35 based on one or more characteristics of active trading order 24b. Such features may include, for example, the trading value, trading product type, or trading product quantity associated with the active trading order 24b. In one embodiment, the increase in trading credit 35 may be a configurable percentage of the trading value of active trading order 24b. The configurable percentage that decreases trading credit 35 in response to receiving active trading order 24b may be the same as the configurable percentage that increases trading credit 35 in response to receiving passive trading order 24a. May be different.

  As previously mentioned, trading platform 18 may determine that a particular active trading order 24b has a specific active trading order 24b if a reduction in trading credit 35 caused by active trading order 24b results in trading credit 35 being below a configurable threshold 37. Execution may be avoided. The configurable threshold 37 may be any suitable level or value that governs and / or limits the execution of active trading orders 24b. As an example, trading platform 18 may be configured such that configurable threshold 37 is zero. In this example, if the active trading order 24b presented by trader 12 causes trading credit 35 associated with trader 12 to fall below zero, trading platform 18 avoids executing active trading order 24b. May be. Although the configurable threshold 37 in the above example is zero, it will be appreciated that the configurable threshold 37 may be set as any suitable value or level.

  In one embodiment, the configurable threshold 37 may be the same for each trader 12 of the trading system 10. In other embodiments, the configurable threshold 37 may be different for the various traders 12 of the trading system 10. A configurable threshold 37 associated with a particular trader 12 can be attributed to one or more attributes of that trader 12, such as size, expected trading activity, trading history, affiliation, or any number and combination of characteristics of the trader 12 It may be based at least in part. In certain embodiments, the configurable threshold 37 may be based on the duration of a given trading session and / or the amount of trading activity in the trading system 10. For example, during times of low trading activity in trading system 10, trading platform 18 may increase or decrease threshold 37 that may be set to be preferred or not preferred for trader 12. Similarly, during periods of high trading activity, trading platform 18 may increase or decrease threshold 37 that may be set to be favorable or unfavorable to trader 12.

  Trading platform 18 avoids the execution of certain active trading orders 24b when a reduction in trading credit 35 caused by active trading order 24b results in trading credit 35 being below a configurable threshold 37. Also good. In some embodiments, avoiding execution of the active trading order 24b is to delete the active trading order 24b, not present the active trading order 24b to the market center 40, or the active trading order 24b executes May also have other suitable steps to prevent the execution of the active trading order 24b, and / or to reply to the trader 12 without presenting the active trading order 24b for execution, and / or Good. In one embodiment, upon receiving a particular trading order 24 from trader 12 that results in trading credit 35 being below configurable threshold 37, trading platform 18 may set trading credit 35 with a particular trading order 24. A message may be sent that induces or requests to change a particular trading order 24 so that it does not fall below the threshold 37. For example, if a particular trading order 24 is an active trading order 24b, trading platform 18 may make the particular trading order 24 a passive trading order 24a and / or have a higher or lower trading value. It may be recommended to the trader 12 to change to In one embodiment, when a particular trading order 24 is received from a trader 12 that results in the trading credit 35 being below a configurable threshold 37, the trading platform 18 may receive a trading credit 35 due to the modified trading order 24. Certain trading orders 24 may be automatically changed so as not to fall below a configurable threshold 37.

  In the foregoing example, trading platform 18 stores, determines and adjusts trading credit 35 associated with a particular trader 12. However, in some embodiments, these functions and operations may be performed by the interface server 15 or may be performed by the interface server 15 in cooperation with the trading system 18. For example, the interface server 15 may have all or part of an application program interface (API) associated with the trading platform 18. In particular, the interface server 15 assigns initial trading credit 35, determines trading credit 35, increases trading credit 35 in response to receiving passive trading order 24a, and receives active trading order 24b. Accordingly, the trade credit 35 may be reduced and execution of a particular trade order 24 may be avoided if the particular trade order 24 causes the trade credit 35 to fall below a configurable threshold 37. Thus, in certain embodiments, the functions of determining, adjusting and using trade credit 35 may be performed by one or more interface servers 15.

  According to certain embodiments, using trading credit 35 to manage the processing of trading orders 24 may provide various advantages. It should be noted that one or more embodiments may or may not enjoy some or all of the advantages described below. One advantage is that trading platform 18 allows trader 12 to passive trading order 24a by reducing trading credit 35 in response to active trading order 24b and increasing trading credit 35 in response to passive trading order 24a. The point is to encourage them to present. By prompting for more passive trading orders 24a, trading platform 18 may increase the liquidity of trading system 10. Another advantage is that trading platform 18 may increase or decrease trading credit 35 in proportion to the trading value associated with trading order 24. Thus, the presentation of a large passive trading order 24a with high trading value may result in a further increase in trade credit 35 compared to the presentation of a small passive trading order 24a with low trading value. Accordingly, trading platform 18 may prompt trader 12 to present a large passive trading order 24a. Thereby, trading platform 18 may increase the liquidity of trading system 10.

  2A and 2B provide an example of using transaction credit 35 to manage the trading activity of a particular trader 12 in accordance with a particular embodiment of the present invention. In particular, FIG. 2A shows an example of a rule 36 stored in the memory 34. In this example, the rule 36 has four rules (rules 36a to 36d). Rule 36a is that at the start of a trading session for a particular trader 12, trading platform 18 assigns (or resets) an initial trading credit 35 of 5,000,000 units to that trader 12. Rule 36b determines that in response to receiving passive trading order 24a, trading platform 18 calculates an increase in trading credit 35, which is equal to 25% of the trading value of passive trading order 24a. is there. Rule 36c determines that in response to receiving active trading order 24b, trading platform 18 calculates a decrease in trading credit 35, which is equal to 50% of the trading value of active trading order 24b. is there. Rule 36d determines that if the calculated reduction results in the trading credit 35 being less than zero units, the trading platform 18 does not present the active trading order 24b to the market center 40 for execution without submitting to the active trading order 24b. The order 24b is to be deleted.

  FIG. 2B shows an example of a trader profile 38 according to a particular embodiment of the present invention. In this example, trader profile 38 has a record of trading activity of trader 12 according to rules 36a-d shown in FIG. 2A. In this example, trader profile 38 indicates that a trading session has started for a particular trader 12. At the start of a trading session, trading platform 18 allocates 5,000,000 units of initial trading credit 35 to trader 12 based on rules 36a in memory 34. Trading platform 18 then receives a passive trading order A from trader 12 with a trading value of $ 10,000,000. Since trading order A is passive, the trading platform increases trading credit 35 to 7,500,000 units (ie, 5,000,000+ (0.25 × 10,000,000)) and places passive trading order A in one or more markets for execution Present to center 40. Trading platform 18 receives an active trading order B from trader 12 with a trading value of $ 10,000,000. Since the trading order is active, trading platform 18 calculates that the reduction in trading credit 35 will be 5,000,000 units (0.50 × $ 10,000,000). Since subtracting 5,000,000 units from trade credit 35 does not cause trade credit 35 to fall below a specific configurable threshold 37 of zero, the trading platform will subtract the calculated decrease from trade credit 35, This results in an adjusted trade credit of 2,500,000 units. In addition, trading platform 18 presents active trading order B to one or more market centers 40 for execution.

  In this example, trading platform 18 then receives an active trading order C from trader 12 with a trading value of $ 20,000,000. Since trading order B is active, trading platform 18 calculates that the reduction in trading credit 35 will be 10,000,000 units (0.50 × $ 20,000,000). The trading platform avoids executing active trading order C because subtracting 10,000,000 units from trading credit 35 results in trading credit 35 being less than zero configurable threshold 37. The trading platform then receives a passive trading order D from the trader 12 with a trading value of $ 20,000,000. Because trading order D is passive, trading platform 18 increases trading credit 35 to 7,500,000 units (ie, 2,500,000+ (0.25 × 20,000,000)) and creates one or more passive trading orders D for execution. Present it to the market center 40. Thus, by reducing trade credit 35 in response to active trading order 24b and increasing trade credit 35 in response to passive trading order 24a, trading platform 18 in this example allows trader 12 to pass passive trading order. Provide an incentive to present 24a.

  Although the previous example shows assigning (or resetting) initial trading credit 35 to trader 12 at the start of each trading session, trading platform 18 assigns initial trading credit 35 to trader 12 at the start of each trading session. It can be seen that there is no need to assign (or reset) to. In particular, according to a particular embodiment, trading platform 18 assigns initial trade credit 35 to trader 12 upon registration and then does not reset trade credit 35 at the start of a particular trade session. Although the above example shows a specific configurable threshold 37 of zero, it will be appreciated that the configurable threshold 37 may be configured to be any suitable value or level.

  Although the previous example shows a rule 36 that increases or decreases the trading credit 35 based on a percentage of the trading value of the trading order 24, the trading credit 35 can be increased or decreased by any suitable criteria (eg, trading order). 24 size, type of trading product associated with trading order 24, or any number and combination criteria, etc.). While the above example shows increasing or decreasing trade credit 35 based on specific percentages (ie 50% and 25%), according to a specific embodiment, trade credit 35 is It can be seen that it may be adjusted based on any configurable percentage of the 24 transaction values. Alternatively or additionally, the increase or decrease in trade credit 35 may be based on a fixed value, stratum, time, and / or other suitable algorithm.

  According to certain embodiments, trading platform 18 may be configured to cause trading credit 35 associated with trader 12 to decay at a configurable rate over time. The trade credit 35 decay may be triggered based on any suitable criteria. For example, trade credit 35 decay may be triggered by inactivity of trader 12 and / or by trade credit 35 exceeding a decay threshold. According to certain embodiments, trading platform 18 may cause trading credit 35 associated with trader 12 to begin to decay if trader 12 has been inactive for a longer period of time. In another embodiment, if trade credit 35 increases such that trade credit 35 exceeds a configurable decay threshold, trading platform 18 may cause trade credit 35 to decay until trade credit 35 falls below a configurable decay threshold. May occur. The attenuation threshold may be configured to be greater than, equal to, or less than the initial transaction credit 35 assigned to the trader 12. The decline in trade credit 35 may have a decrease in trade credit 35 as a function of time. For example, trade credit 35 may be set to decay by only 1,000 units per minute, by 100,000 units per hour, or at any suitable rate.

  Examples of specific embodiments of the invention are shown. Referring to the example shown in FIG. 2B, trading platform 18 may have trade credit 35 decay at a rate of 10,000 units per minute if trading platform 18 has not received at least one passive trading order 24a from trader 12 per hour. You may have specific rules 36 that will happen. In this example, the session begins at AM 10:00 and trading platform 18 receives passive trading order A at AM 10:15. Next, trading platform 18 receives passive trading order D at AM 10:45. Passive trading order D causes trading credit 35 to increase to 7,500,000 units. Based on rule 36, if trading platform 18 does not receive other passive trading orders until AM 11:45, trading platform 18 may cause trading credit 35 to begin to decay. In this example, trader 12 does not present another passive trading order 24a until AM 11:55 (10 minutes after trading credit 35 begins to decay at a rate of 10,000 units per minute). Thus, by AM11: 55, trade credit 35 will decay to 7,400,000 units. In this example, trading platform 18 stops decaying trading credit 35 upon receiving passive trading order 24a at AM 11:55. Trader 12 must submit another passive trading order 24a by AM12: 55 before trading credit 35 decay is activated again. According to certain embodiments, trading platform 18 may prompt to present passive trading orders 24a more frequently by causing trading credit 35 to decay in response to trader 12 inactivity. . Frequent presentation of passive trading orders 24a may increase the liquidity of trading system 10.

  The previous example described triggering the decay of trade credit 35 based on inactivity of trader 12. However, it will be appreciated that transaction credit 35 decay may be triggered based on any suitable criteria (eg, transaction credit 35 has exceeded a configurable decay threshold). The above example shows an attenuation rate of 10,000 units per minute, but it will be appreciated that the attenuation rate may be configured to be any suitable rate.

  According to certain embodiments, one or more traders 12 of trading system 10 may use order price input module 16 to present order price input 26 to trading platform 18. As described above, the order price input 26 may be a real-time (or substantially real-time) stream showing the current best bids and / or offers that the trader 12 wishes to send or make available for the item. In certain embodiments, trading system 10 may be configured such that one or more order price inputs 26 are designated as restricted. A particular order price entry 26 may be designated as limited based on any suitable criteria. For example, order price entry 26 associated with trader 12 may be limited based on trader 12 size, trader 12 account information, trader 12 trading history, and / or other numbers and combinations of appropriate criteria. May be specified. In one embodiment, trading platform 10 may limit active trades by trader 12 associated with order price entry 26 designated as restricted, but not restrict active trades by other traders 12. Transaction credit 35 may be used.

  FIG. 3 shows a flowchart for restricting active transactions in the transaction system 10. The method begins at step 302 when trading platform 18 receives trading order 24 from trader 12. In step 304, trading platform 18 determines trading credit 35 associated with trader 12. Trader profile 38 of trader 12 may be stored in memory 34 and may have trade credit 35 associated with trader 12. In step 306, trading platform 18 determines whether the received trading order 24 is an active trading order 24b. If trading platform 18 determines that the trading order received in step 306 is not active trading order 24b (eg, passive trading order 24a), then in step 308, trading platform 18 determines the trading associated with trader 12. Increase credit 35. In certain embodiments, trading credit 35 may increase based at least in part on the trading value of received trading order 24. In step 310, trading platform 18 presents the received trading order 24 for execution to one or more market centers 40.

  However, if the trading platform 18 determines that the trading order 24 received at step 306 is an active trading order 24b, then at step 312 the trading platform calculates a decrease in the trading credit 35. The calculated credit of the trading credit 35 may be based at least in part on the trading value of the received trading order 24. In step 314, trading platform 18 determines whether the calculated reduction subtraction results in trading credit 35 associated with trader 12 being below configurable threshold 37. If the trading platform determines that subtracting the calculated decrease from the trade credit 35 in step 314 results in the trade credit 35 being below a configurable threshold 37, then in step 320 the trade platform receives the received trade Avoid executing order 24. In one embodiment, avoiding execution of a received trading order 24 includes deleting the received trading order 24, not presenting the received trading order 24 to the market center 40, executed by the received trading order 24. Having other suitable steps to prevent the execution of received trade orders 24, and / or to send back to the trader 12 without presenting the received trade orders 24 for execution, and / or Good.

  However, if subtracting the calculated decrease from trade credit 35 associated with trader 12 in step 314 does not cause trade credit 35 to fall below a configurable threshold 37, then in step 316 the trading platform Subtract the calculated decrease from Credit 35. The method then proceeds to step 310 where the trading platform 18 presents the received trading order 24 for execution to one or more market centers 40. The method then ends. In one embodiment, trading platform 18 may receive a next trading order 24 from trader 12. Trading platform 18 may repeat the method shown in FIG. 3 for each of the next trading orders 24.

  While the invention has been described in several embodiments, numerous changes and modifications may be suggested to one skilled in the art. The present invention is intended to include such modifications and variations that fall within the scope of the appended claims.

An embodiment of a transaction system according to the present invention Example trading rules according to particular embodiments of the invention Example of a trader profile according to a specific embodiment of the invention Flowchart for using transaction credit to limit active transactions in an electronic transaction system in accordance with certain embodiments of the present invention.

Claims (38)

A system for managing trade orders,
A memory operable to store trade credit associated with the trader;
(a) receiving a trading order from the trader,
(b) determine the transaction credit associated with the trader;
(c) if the received trading order is a passive trading order;
Increase the trading credit and present the received trading order for execution;
(d) if the received trading order is an active trading order;
Calculating a decrease in the transaction credit,
Subtracting the calculated decrease from the trade credit does not cause the trade credit to fall below a configurable threshold;
Presenting the received trading order for execution and subtracting the calculated decrease from the trading credit;
A processor operable to avoid execution of the received trading order if subtracting the calculated decrease from the trading credit causes the trading credit to fall below the configurable threshold; System with. If the trader is a new trader,
The system of claim 1, wherein determining transaction credit comprises assigning initial transaction credit to the trader. The trader is one of a plurality of traders,
The system of claim 2, wherein the initial transaction credit assigned to the trader is substantially the same as an initial transaction credit assigned to any one of the plurality of traders.   Determining trading credit comprises resetting the trading credit to be equal to the initial trading credit if the received trading order is an initial trading order received from the trader during a configurable session. The system of claim 1.   The system of claim 1, wherein the passive trading order is a bid or an offer.   The system of claim 1, wherein the active trading order is a purchase order or a sales order. The received trading order relates to trading value,
If the transaction value increases, the increase in transaction credit is based at least in part on the transaction value;
The system of claim 1, wherein if the transaction value decreases, the decrease in transaction credit is based at least in part on the transaction value. The increase in transaction credit is a configurable percentage of the transaction value;
The system of claim 7, wherein the decrease in transaction credit is a configurable percentage of the transaction value.   The system of claim 1, wherein the processor is further operable to cause the transaction credit to decay at a configurable rate over time. The configurable threshold is a first configurable threshold less than the initial transaction credit assigned to the trader;
The processor causes the trade credit to decay at a configurable rate over time when the trade credit exceeds a second configurable threshold, the second configurable threshold being the trader The system of claim 1, wherein the system is greater than an initial transaction credit assigned to.   The system of claim 1, wherein the trader is associated with order price entry designated as restricted.   The system of claim 1, wherein the configurable threshold is zero. Avoiding execution of the received trade order is
Deleting the received trading order without presenting the received trading order for execution;
Suppressing the received trading order from executing;
The system of claim 1, comprising at least one of: replying the received trading order to the trader without presenting the received trading order for execution. The received trading order is a first trading order;
The processor is
Receiving a plurality of other trading orders after receiving the first trading order;
The system of claim 1, further operable to repeat steps (b)-(d) for each of the plurality of other trading orders. A method for managing trading orders,
(a) Receive trade orders from traders,
(b) determine the transaction credit associated with the trader;
(c) if the received trading order is a passive trading order;
Increase the trading credit and present the received trading order for execution;
(d) if the received trading order is an active trading order;
Calculating a decrease in the transaction credit,
Subtracting the calculated decrease from the trade credit does not cause the trade credit to fall below a configurable threshold;
Presenting the received trading order for execution and subtracting the calculated decrease from the trading credit;
Subtracting the calculated decrease from the trading credit to avoid execution of the received trading order if the trading credit occurs below the configurable threshold. If the trader is a new trader,
The method of claim 15, wherein determining transaction credit comprises assigning initial transaction credit to the trader. The trader is one of a plurality of traders,
The method of claim 16, wherein the initial trading credit assigned to the trader is substantially the same as an initial trading credit assigned to any one of the plurality of traders.   Determining trading credit comprises resetting the trading credit to be equal to the initial trading credit if the received trading order is an initial trading order received from the trader during a configurable session. The method of claim 15.   The method of claim 15, wherein the passive trading order is a bid or an offer.   The method of claim 15, wherein the active trading order is a purchase order or a sales order. The received trading order relates to trading value,
If the transaction value increases, the increase in transaction credit is based at least in part on the transaction value;
16. The method of claim 15, wherein if the transaction value decreases, the decrease in transaction credit is based at least in part on the transaction value. The increase in transaction credit is a configurable percentage of the transaction value;
The method of claim 21, wherein the decrease in transaction credit is a configurable percentage of the transaction value.   16. The method of claim 15, further comprising causing the trade credit to decay at a configurable rate over time. The configurable threshold is a first configurable threshold less than the initial transaction credit assigned to the trader;
If the transaction credit exceeds a second configurable threshold, it causes the transaction credit to decay at a configurable rate over time, the second configurable threshold being an initial value assigned to the trader The method of claim 15, wherein the method is greater than the transaction credit.   The method of claim 15, wherein the trader is associated with order price entry designated as restricted.   The method of claim 15, wherein the configurable threshold is zero. Avoiding execution of the received trade order is
Deleting the received trading order without presenting the received trading order for execution;
Suppressing the received trading order from executing;
16. The method of claim 15, comprising at least one of: replying the received trading order to the trader without presenting the received trading order for execution. The received trading order is a first trading order;
Receiving a plurality of other trading orders after receiving the first trading order;
The method of claim 15, further comprising repeating steps (b)-(d) for each of the plurality of other trading orders. Logic encoded in a computer readable medium for managing trade orders,
When executed
Receive trade orders from traders,
Determine transaction credit associated with the trader;
If the received trading order is a passive trading order,
Increase the trading credit and present the received trading order for execution;
If the received trading order is an active trading order,
Calculating a decrease in the transaction credit,
Subtracting the calculated decrease from the trade credit does not cause the trade credit to fall below a configurable threshold;
Presenting the received trading order for execution and subtracting the calculated decrease from the trading credit;
Logic operable to avoid execution of the received trading order if subtracting the calculated decrease from the trading credit causes the trading credit to fall below the configurable threshold. If the trader is a new trader,
30. The logic of claim 29, wherein determining transaction credit comprises assigning initial transaction credit to the trader.   Determining trading credit comprises resetting the trading credit to be equal to the initial trading credit if the received trading order is an initial trading order received from the trader during a configurable session. 30. The logic of claim 29. The passive trading order is a bid or an offer;
30. The logic of claim 29, wherein the active trading order is a purchase order or a sales order. The received trading order relates to trading value,
If the transaction value increases, the increase in transaction credit is based at least in part on the transaction value;
30. The logic of claim 29, wherein if the transaction value decreases, the transaction credit decrease is based at least in part on the transaction value. The increase in transaction credit is a configurable percentage of the transaction value;
34. The logic of claim 33, wherein the decrease in transaction credit is a configurable percentage of the transaction value.   30. The logic of claim 29, wherein when executed, the logic is further operable to cause the trade credit to decay at a configurable rate over time.   30. The logic of claim 29, wherein the trader is associated with order price entry designated as restricted. Avoiding execution of the received trade order is
Deleting the received trading order without presenting the received trading order for execution;
Suppressing the received trading order from executing;
30. The logic of claim 29, comprising at least one of: replying the received trading order to the trader without presenting the received trading order for execution. The received trading order is a first trading order;
The logic, when executed, receives a plurality of other trading orders after receiving the first trading order;
30. The logic of claim 29, further operable to repeat steps (b)-(d) for each of the plurality of other trading orders.

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